As per Rule 173L, refund is admissible if processing of goods is done within six months irrespective when the reprocessed goods were sent to buyer.

PJ/Case law/2013-14/1698

Case:- COMMISSIONER OF CENTRAL EXCISE, COIMBATORE V/S. LAXMI MACHINE WORKS LTD.

Citation:- 2013-TIOL-561-HC-MAD-CX

Brief facts: - The Civil miscellaneous Appeal is filed by Revenue as against the Order of Customs, Excise and Service tax Appellate Tribunal dated 03/05/2004 made in the final order No. 697/2005. The Appeal arises out of the refund claim made by the assessee under Rule 173L (3) of the Central Excise 1944, in respect of goods (casting) which were received back for making certain repair and which were cleared again on payment of duty after making necessary re-work . The assessee filed refund claim of sum of Rs. 207360/- remitted towards payment of excess duty at the time of clearing the castings after necessary re- work. The assessing authority though, found that the subject goods were received within one year from the date of clearance and refund claim was also filed within the time limit of one year, rejected the refund claim on the ground that the assessee contravened the provision of sub Rule 3 of Rule 173 L of Central Excise, 1944 by making clearing of goods after re processing after limitation of six months from the date of re-entry of said goods.

The lower authority upheld the order passed by the assessing authority, but on the different ground that the assessee completed the process mentioned under sub Rule (1) and rendered the accounts in terms of Rule (2) to the satisfaction of commissioner within six month, but the goods were returned to the same customer only after six month from the date of such return, which is contravention of sub Rule (3) of Rule 173L and the assessee is, hence, disentitled to the refund.

The Respondent went on further appeal before the Appellate Tribunal. The Appellate Tribunal set aside the order of the lower Authorities on different ground that the appellant had fulfilled the requirement of Rule 173L (3) and that Rule 173L (3) does not contain any mandatory Requirement to dispatch the goods after re-work to the same customer within six months; as such, the reason on which the refund claim was rejected by the lower authorities was not inaccordance with Rule 173L.

Reasoning of judgment: - Rule 173 of Central Excise, 1944 reveals that the time limit of within six month is apply only for processing and for rendering the accounts before the authority concerned and not for clearance of the goods. That being the factual and legal position, the reason for rejection of the claim by the lower authorities has no legal basis, as rightly decided by the Tribunal. Thus, we do not find any justification to interfere with the factual finding of the Tribunal and the order of the Tribunal warrants no interference.

Decision: - Appeal dismissed.

Comment:-The analogy drawn from this case is that the time limit of six months that is specified in Rule 173L is for processing of goods and rendering the accounts before the concerned authority and not for clearance of goods. As far as the goods are processed within a period of 6 months from their receipt, refund claim of excess duty paid on clearance of reprocessed goods is admissible.

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PJ/Case law/2013-14/1698

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